2018 (5) TMI 1501 - AT - Central Excise

Cash Refund - closure of unit - whether the appellants are entitled to cash refund of accumulated Cenvat Credit lying in their Books of Accounts on the date of closure of their unit? - Held that - the issue of admissibility of cash refund of accumulated credit u/r 5 of CCR, 2004 has been settled by the by the Larger Bench of this Tribunal in Steel Strips case 2011 (5) TMI 111 - CESTAT, NEW DELHI - out of the total cash refund amount of ₹ 5.54,318/-, it is claimed that certain amount of credit claimed to be attributable to export of the goods, hence eligible to refund. To ascertain the quantum of cash refund due to export of goods, the matter needs to be remanded to the Adjudicating Authority and also to examine the eligibility of the said refund - appeal allowed by way of remand.

Summary

Issues Involved:
Whether the appellants are entitled to cash refund of accumulated Cenvat Credit on closure of their unit.

Analysis:
The appeal was filed against the order passed by the Commissioner (Appeals) regarding the eligibility of cash refund of accumulated Cenvat Credit. The appellant claimed that a portion of the credit is attributable to input/input services used in the manufacture of finished goods cleared for exports. The appellant argued that while cash refund on closure of the unit may not be admissible, the credit availed on input/input services used in the export of goods is eligible for cash refund under Rule 5 of the CCR, 2004. The appellant requested a remand to the Adjudicating Authority to ascertain the facts. The Revenue, however, supported the findings of the Commissioner (Appeals) and argued that the issue of cash refund on closure of the unit had not been examined by the authorities below. The Revenue contended that the accumulated Cenvat credit on closure of the unit is not admissible to cash refund under Rule 5 of the CCR, 2004, citing a decision of the Larger Bench of the Tribunal.

The Tribunal noted that the issue of admissibility of cash refund of accumulated credit under Rule 5 of CCR, 2004 had been settled by the Larger Bench in a previous case. However, the Tribunal acknowledged that a certain amount of credit claimed by the appellant was attributable to the export of goods, making it eligible for refund. The Tribunal found merit in this contention, stating that the admissibility of cash refund on goods exported was not negated by the previous decision of the Larger Bench. Therefore, the Tribunal decided to allow the appeal by way of remand. The matter was to be sent back to the Adjudicating Authority to determine the quantum of cash refund due to the export of goods and to examine the eligibility of the said refund in light of Rule 5 of the CCR, 2004 and the legal principles established in the previous case cited.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the appeal by way of remand for further examination of the eligibility of cash refund of accumulated Cenvat Credit attributable to the export of goods.